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Chamber and committees

Meeting of the Parliament

Meeting date: Tuesday, January 10, 2023

Agenda: Time for Reflection, Business Motion, Topical Question Time, Point of Order, National Health Service (Winter Pressures), Energy Strategy and Just Transition Plan, Independence Referendum, Urgent Question, Proposed Domestic Building Environmental Standards (Scotland) Bill, Decision Time, Shared Parenting


Energy Strategy and Just Transition Plan

The Deputy Presiding Officer (Annabelle Ewing)

The next item of business is a statement by Michael Matheson on Scotland’s national energy strategy and just transition plan. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.


The Cabinet Secretary for Net Zero, Energy and Transport (Michael Matheson)

I am pleased to inform Parliament that today, the Scottish Government is publishing its draft energy strategy and just transition plan. The draft strategy maps out the future of our energy sector and sets out an ambitious suite of actions for the Scottish Government, along with actions for industry, the regulator and the UK Government, to realise that bright future over the next decade.

We are at a pivotal point in Scotland’s transition to net zero and the strategy charts a clear course for the transformation of the energy sector—one of Scotland’s most important industries—to 2030 and beyond. That transition must be achieved in a way that delivers for the people of Scotland to enable us to embrace the opportunities of a green economy.

This is a time of unprecedented uncertainty in global and national energy markets. High energy prices are impacting people, communities and businesses across Scotland. Those uncertainties bring even more impetus to the need to deliver a decarbonised, affordable and secure energy system.

Scotland already has an enviable track-record in renewables. The success of the ScotWind leasing round—the world’s largest floating offshore leasing round—and our long-standing commitment to onshore wind, are strong foundations on which to grow our renewables capabilities even further. Wind power is one of the lowest cost forms of electricity and the Scottish Government is clear that that is where we should focus to reduce costs in the long term and address our vulnerability to future energy cost crises.

The strategy builds on that success with three overarching objectives. The first is to significantly scale up renewable energy production, helping to secure a just transition away from fossil fuels. As part of the transition, overall energy demand will also reduce.

The second objective is to secure continued and increasing investment in the net zero energy economy. The delivery of the strategy will mean more jobs, a growing supply chain, new manufacturing capabilities, new skills, new export opportunities and thriving communities.

The third objective is to deliver a fairer and more secure energy system that is no longer reliant on volatile international commodity markets and delivers lower costs for consumers. That requires stronger and more targeted action from the United Kingdom Government to reform the energy market in a way that is fair, and to create the right conditions for the investment needed in infrastructure to support the expansion of renewables.

The draft strategy sets out the significant opportunities for Scotland in transforming our energy system. Scotland already has 13.4GW of renewable electricity generation capacity. It is our ambition to deliver at least 20GW of additional low-cost renewable electricity capacity by 2030, which could generate the equivalent of around 50 per cent of Scotland’s current total energy demand.

Scotland’s rich renewables resource means that we can not only generate enough cheap green electricity to power Scotland’s economy, but also generate a surplus and open up new economic opportunities for export. However, we must make those changes to our energy system in a way that is just. The transition must maximise economic benefits, ensure a fair distribution of opportunities and risks, and do so through a process that is inclusive. The oil and gas industry has played an important role in our economy and been part of our national identity for decades. However, our previous policy position of maximum economic recovery is no longer appropriate.

The strategy explores the challenges of moving away from oil and gas and the ability of low-carbon and net zero energy generation to not just replace, but build on the employment opportunities that people, particularly in the north-east, have come to rely on. In the strategy are the first results of the independent research that was announced in 2021 and scrutinised by a panel of experts on the future role of North Sea oil and gas in Scotland’s energy system and economy.

That work shows that as an increasingly mature basin, production in the North Sea is expected to be around a third of 1999 levels by 2035 and less than 3 per cent of the 1999 peak by 2050. That projection takes account of the remaining potential development in the North Sea and is without any political decision to reduce consumption due to the climate emergency. That means that domestic production will effectively end within the next 20 years if we do nothing. The draft strategy is consulting on whether we should act faster than that.

Whatever people’s position on the pace at which we move away from fossil fuels, a failure to act now to deliver a just transformation of our energy system would be to neglect our energy security and the future of our economy, and risk the kind of damage to industrial communities that we saw in the 1980s. However, if we seize the opportunity that is presented by the transition, the number of low-carbon jobs in the energy production sector is estimated to rise from 19,000 in 2019 to 77,000 by 2050, delivering a net gain in jobs across the energy production sector overall.

The strategy shows how we can build a positive route through the transition, boost employment in energy generation, and provide energy security. That is why today’s publication is not just a draft energy strategy; it is also the first draft just transition plan.

We recognise that the transition must take account of different geographies, industries and infrastructure across the country. The draft energy strategy and just transition plan will be further developed through engagement with trade unions, businesses and communities. We are pleased to have supported the Scottish Trades Union Congress to ensure that workers have the opportunity to participate.

Our £500 million just transition fund is supporting Moray and the north-east to become centres of excellence for the transition. Projects such as the deployment of a new digital offshore energy skills passport to support the transition of skills and jobs across the rapidly changing industry are already under way. That work is led by OPITO. I hope that, as we move forward, the UK Government, which has, of course, benefited from oil and gas revenues for so long, will make a matching contribution.

The draft strategy sets out our key ambitions for renewables deployment and brings together clear policy positions and a route map to realise those ambitions. We have made proposals for key sectors. We propose increasing onshore wind from 8.78GW as of June 2022 to over 20GW by 2030. That would more than double our existing capacity. We propose increasing offshore wind from 1.9GW, as of June 2022, through a pipeline of 3.8GW already consented, to between 8GW and 11GW by 2030. The results of the ScotWind leasing round reflect market ambitions in excess of current planning assumptions.

The strategy consults on what a future ambition should be for solar, building on our current 411MW of capacity. Tidal stream also has potential. We are also consulting on an ambition for tidal and wave energy.

We recognise the huge potential of pumped hydro storage power to play a significant role in our future energy system. The lack of an appropriate market mechanism from the UK Government is frustrating the realisation of that opportunity for significant economic investment, job creation, and gigawatts of clean energy. Coire Glas, for example, represents more than £1 billion of investment, with up to 1.5GW of capacity and 30 gigawatt hours of storage. The UK Government must take action to ensure that that potential is realised.

We will work with communities, energy companies and parts of the public sector, such as Forestry and Land Scotland and Scottish Water, that already generate renewables to expand community ownership. We also want to hear views on those ambitions from unions, wider industry and communities.

The draft strategy reaffirms the Government’s position that we do not want or need new nuclear power. We are clear that the focus must be on developing flexible and renewable technologies rather than new nuclear fission plants, which are expensive and take decades to deliver. Although we do not have the power to influence offshore oil and gas exploration and extraction, we are seeking views on a more robust climate compatibility checkpoint, including for oil and gas fields that are already licensed but are not developed, and on a presumption of no new exploration in the North Sea.

The strategy reaffirms our commitment to, and the importance of, carbon capture, utilisation and storage to Scotland’s energy transition. We continue to engage with the UK Government to encourage it to make swift decisions to support the Acorn project in the north-east, which is critical to not just Scotland’s transition but that of the wider UK.

The Acorn project is connected to the development of a hydrogen economy, but it is clear that the most significant potential in hydrogen comes from the creation of green hydrogen from surplus renewable energy. As we set out in the “Hydrogen Action Plan”, which was published in December, we will rapidly grow Scotland’s hydrogen economy to deliver a renewable and low-carbon hydrogen production ambition of 5GW by 2030 and 25GW by 2045.

To put that in context, 5GW could produce energy that is equivalent to about a sixth of Scotland’s total energy demand. Much of that hydrogen could be generated from our offshore wind sector, with the potential to create a new energy export industry for Scotland. In the coming months, we will develop sector export plans on renewables and hydrogen to set out how energy can continue to be a critical export growth sector as we transition to net zero.

The strategy sets out how we will meet the challenges of reducing demand so that Scotland’s main energy-using sectors—heat in buildings, transport, industry and agriculture—use energy more efficiently and become largely decarbonised by 2030. That transition requires significant investment that goes beyond what a Government with limited borrowing powers can deliver. We will scale up activity to move from a funding policy model to a financing one. That will effectively leverage private sector investment and action to better amplify the impact of public investment.

The strategy gives investors certainty that Scotland is a place that supports renewable energy whole-heartedly. Our vision is that, by 2045, Scotland will have a climate-friendly energy system that delivers affordable, resilient and clean energy supplies for Scotland’s households, communities and businesses.

The Scottish Government cannot deliver that vision alone. Industry must accelerate investment in key sectors and infrastructure and must continue to build capacity in the Scottish supply chain and the skills of the energy workforce. The UK Government must act on energy security, network investment and market reform, which are its responsibility, as is much of the groundwork that is required for a thriving hydrogen economy.

To deliver on the timescales that are set out, the UK Government must embrace the needs with pragmatism. A copy of the strategy has been forwarded to the Secretary of State for Business, Energy and Industrial Strategy, and I will be inviting the UK Government to join us as part of an energy transition delivery group to deliver the plan.

Achieving the vision for Scotland will be a national endeavour and will require a collective effort at local and national levels across Government, industry and our communities. The consultation on the draft document opens today, and I look forward to hearing views from people across Scotland on critical aspects of our future net zero energy transition.

The cabinet secretary will now take questions on the issues that were raised in his statement. I intend to allow about 30 minutes for questions, after which we will move on to the next item of business.

Liam Kerr (North East Scotland) (Con)

I thank the cabinet secretary for advance sight of his much-delayed energy strategy. This represents a far from happy new year for the tens of thousands of workers who are engaged in the oil and gas sector. Those workers often feel as if they are an afterthought for the Government, and that impression will not improve after today.

While the cabinet secretary trumpets a rise in low-carbon jobs from 19,000 in 2019 to 77,000 in 2050—a target that is so far off that even the Scottish National Party might hit it—members of the Government have been parroting at least one made-up figure about wind power capacity for years, when they have known full well that it lacked any evidential basis. What evidence will the cabinet secretary provide to reassure workers that his numbers are correct this time? When will such jobs become available?

Let us not forget that a survey showed that just one in 10 oil and gas workers feel capable of switching to renewables. The statement’s warm words said nothing about college places or retraining grants and incentives and—bizarrely—there has again been ignorance of the £16 billion North Sea transition deal. What proportion of the oil and gas workforce does the cabinet secretary believe can switch?

Finally, the cabinet secretary talks of domestic production ending and a presumption against new exploration and production. Does he worry that such an approach risks shutting down the industry prematurely, leaving us dependent on imports and undermining the very supply chain that we need to deliver the transition?

Michael Matheson

The member has raised a number of points, and I will try to deal with them in turn.

Let me first turn to the suggestion that in some way we are neglecting the important role that the north-east has played in our energy sector over the years. It is the Scottish Government that is investing half a billion pounds in Moray and the north-east of Scotland through the transition fund to help support that transition—a level of investment that, to date, the member’s colleagues at Westminster have failed to step up and offer. That is the type of investment that will support the transition.

The Westminster Government has repeatedly taken the tax revenue from oil and gas but not invested the money back into the north-east of Scotland and the rest of our economy. What we cannot afford to happen this time around, with renewable energy, is to allow that same trick to be played on the people of Scotland. We need to ensure that the investments that are made in our renewables sector deliver economic benefits here in Scotland.

A very practical example that the member might want to think about when it comes to skills and the people in the oil and gas industry who want to transition into the renewables sector, as well as those who want to stay in the oil and gas sector, is investment in carbon capture, utilisation and storage. That technology allows those who work in the industry to remain in the industry, and those who want to move into the industry to do so. The only reason why that has not happened already is that the UK Government has refused to back the Acorn project.

When it comes to making these decisions, and making sure that we deliver for the future needs of our economy and the energy sector in Scotland, there is one party that we will never take any lectures from. That is the Conservative Party, because of its failure over decades in supporting the energy sector in Scotland.

Colin Smyth (South Scotland) (Lab)

I thank the cabinet secretary for advance sight of his statement.

The long-awaited publication of the draft energy strategy and just transition plan comes at a time when we are facing a cost of living crisis and a climate crisis. The need for a just transition to a low-carbon, affordable energy process has never been more important. However, many of the so-called plans that have been published today are a rehash of existing policies that the Climate Change Committee has said are simply not enough. There is little new that will change the Government’s failure to ensure that our transition is a just one.

In 2010, the Scottish National Party promised that there would be 130,000 jobs in renewables per year by 2020. We would be the Saudi Arabia of renewables, it said. The reality behind the rhetoric is that just a fifth of that number of jobs has been delivered, and supply chain contract after supply chain contract continues to go overseas. Therefore, few people will believe the cabinet secretary’s commitments today.

However, it is not just the jobs that the Government is offshoring: 90 per cent of the energy from the recent ScotWind leasing round will come through overseas-owned multinationals, which are offshoring the billions in profits.

At a time when Labour in Wales has committed to creating a Welsh publicly owned energy firm, and the next UK Labour Government is committed to a UK publicly owned energy firm, why is there no commitment from the Scottish Government in this strategy to a publicly owned energy firm, to keep bills down and to keep the profits here in Scotland?

Michael Matheson

Let me deal first with the point that Mr Smyth is making about the skills in the energy sector, which is extremely important. As we move forward, it is important that we no longer look at the energy sector as being just an oil and gas sector. We need to look at it in a much more holistic fashion, to include oil and gas, renewables and hydrogen. All of those areas play an important part, and it is important as we go forward that we have the right type of skilled workforce in place to support that.

One of the ways in which we will do that is through the green skills strategy, which we have committed to publishing this year. It will set out in detail the measures that will be taken to help to support the transition within the energy sector and green skills. I am sure that the member will be aware of the recent report by PwC that highlighted that Scotland is the part of the UK with the highest green jobs growth—it is where the fastest level of growth is being seen in green jobs. We want to build on and capitalise on that moving forward.

Let me deal with the member’s final point about a public energy company. He will be aware that we considered the possibility of setting up a public energy company in the retail sector, but the present market simply does not allow for that. I am sure that the member will recognise that, for many decades while the Labour Party was in government in Westminster, it failed to put in place any fund to secure some revenue from the North Sea, which could have been invested for future use. It took exactly the same approach that the Westminster Tory Government has taken. For decades, Westminster Governments have quite literally siphoned off the taxes from our oil and gas sector, so we have no benefit to show from them. [Interruption.]

The difference that we see with ScotWind and overseas public energy companies is that the Scandinavian companies have oil and gas—

Excuse me, cabinet secretary. Could we have less sedentary chit chat, please?

Michael Matheson

Scandinavian Governments have had the wisdom to set up funds and companies to invest in such areas. Those countries also have the benefit of being independent, which allows them to free up the finance to make that scale of investment. That is exactly why Scotland should be independent. Not only would we get the revenue benefits from our overall renewable energy sector, we could invest in public infrastructure in our energy sector and have a public energy company that invests in the same way as companies in Norway, Denmark and Sweden have been able to do for decades. Both Labour and the Tories have failed to deliver such a system for decades.

Fiona Hyslop (Linlithgow) (SNP)

The people of Scotland have a clear world advantage in terms of access to natural resources such as wind, water and wave. The energy strategy sets out clear targets and ambitions, and it provides the certainty that developers need to invest in development and skills. However, does the cabinet secretary agree that the strategy cannot just enable the exploitation of our resources by international companies for energy transmission elsewhere? It must ensure that Scotland realises the benefits from access to clean, green, cheaper energy, from the economic activity and from energy and manufacturing jobs here in Scotland. What are the biggest risks to the strategy delivering for the people of Scotland?

Michael Matheson

One of the most important elements of our energy transition is ensuring that the transition is fair and just. We must ensure that Scotland does not simply become a production basin for electricity and hydrogen for domestic and export purposes while not getting any of the economic benefits of that here in Scotland. Even with our limited powers, it is important that we get the supply chain benefits that go alongside such developments.

We saw the impact of the UK Government’s withdrawal of subsidies for onshore wind, which resulted in a rapid contraction of the supply chain in Scotland and the UK as a whole. As a result, Scandinavian countries stole a march on us in developing that technology and manufacturing capability. We cannot make that error again.

The strategy sets out a clear pathway to ensure that we maximise not only the potential from our renewable energy base for domestic and export purposes but the economic benefits here in Scotland. Those benefits should come from not only the production value but the manufacturing of the technology that supports that production. If we develop and manufacture that technology here, we can export it to other parts of the world. If we do that, we will be able to deliver a just transition, which is exactly what the strategy aims to do.

I ask for more succinct answers, because I am keen to call all members who have requested to ask a question.

Edward Mountain (Highlands and Islands) (Con)

I know that the Scottish ministers find wind power statistics hard to understand, but here is a fact that should give them pause for thought. On 14 December last year, only 3.4 per cent of energy across the UK was generated by wind turbines. Surely a successful energy strategy needs dependable and flexible sources of power, so why will the Scottish Government not stop discounting the possibility of creating small modular nuclear reactors?

Michael Matheson

We could take any particular day and look at the contribution that wind makes to our wider energy mix in the UK. I do not know whether the member has looked at what wind is contributing to the UK grid today in terms of output, but it is in the region of 40 per cent of what the UK grid is using at the moment. However, that will change by the hour and at different times, which is why we set out in the strategy the importance of having an energy mix that involves not only onshore and offshore wind but tidal, marine, hydro and pumped storage. We want to ensure that we have a mix that gives us flexibility. I am sure that the member will be aware of the developments that are coming in battery storage, and the capacity that that will provide to store the energy that is generated by renewables.

The member referred to small modular reactors. The reality is that SMRs are at phase 1 in the technology development process and probably at least another six, seven or eight years of a technological process needs to be gone through before we even get to the point at which development could be taken forward. They are 10-plus years away. Given the member’s consideration of the issue, I would have thought that he would be aware of how far off in the distance SMRs are and that he would know that they are not a reliable way for us to plan to meet energy needs in future.

Paul McLennan (East Lothian) (SNP)

I thank the cabinet secretary for his statement, which presents fantastic opportunities for us to move to net zero, to improve energy security and to boost our Scottish economy. What workforce analysis was carried out in preparing the strategy? How did we arrive at the figure of 77,000 jobs? How will we monitor that figure for jobs acquired, and how will that be reported?

Michael Matheson

The figures were drawn from a variety of reports, including one from Robert Gordon University on the potential for development in the renewable and clean energy sector. They are also part of the wider analysis that we have carried out in relation to oil and gas and the transition away from fossil fuels. Reports from Offshore Energy UK and OPITO have also contributed to that. All those reports looked at the potential for the workforce in the green energy sector as we transition. It is extremely important that we maximise the economic and employment opportunities in the energy sector, and that is exactly what the strategy aims to do.

Mercedes Villalba (North East Scotland) (Lab)

I thank the cabinet secretary for the advance sight of his statement and of the draft energy strategy and just transition plan, which states:

“We are supporting the reskilling of oil and gas workers by funding an offshore skills passport through our Just Transition Fund.”

Such a passport must be more than just an app that tells the user where their qualification gaps are; it must allow for a seamless transition—a fair and just transition—for offshore workers by avoiding costly duplication of training for them. Failing that, the Scottish Government could look at strengthening licensing and leasing conditions to require energy employers to recognise offshore workers’ prior training and existing qualifications. Will the cabinet secretary commit to working with the energy unions to remove financial barriers to transition for Scotland’s offshore workers?

Michael Matheson

That is exactly what the passport will do—it will provide seamless movement between the oil and gas and renewables sectors. I hosted the skills summit up in Aberdeen with the trade unions. The STUC and the National Union of Rail, Maritime and Transport Workers, which were part of that, warmly welcomed the work that is taking place to deliver exactly that approach. They have stated publicly that a big step forward has been made in delivering that type of passport. What the member is looking for is exactly what the passport will deliver, and that is why we are looking to roll it out this year and why the unions are so supportive of it.

Audrey Nicoll (Aberdeen South and North Kincardine) (SNP)

The draft energy strategy and just transition plan provides a route map of actions that are central to meeting our climate change targets, and the north-east communities will play a significant part in delivery of the plan. Will the cabinet secretary outline how the Scottish Government will ensure that a balance is struck between the need to deliver a just transition and the need to ensure that communities are not only consulted but empowered to make a valid and positive contribution to local delivery and outcomes?

Michael Matheson

Audrey Nicoll raises a really important point. In focusing on delivering a just transition and the economic opportunities that go alongside the transition to a low-carbon energy system, we need to ensure that we take communities with us, because they will be impacted by the technology that is deployed to deliver that system. That is why, for example, with onshore wind, we have good-practice guidance through which we encourage developers to be much more focused in working with communities to allow them to be party to the process and to look at co-production as part of that process. We have rolled out greater community programmes to allow communities that want to develop their own energy network to do so.

Therefore, it is important that we continue to ensure that those who are developing energy production facilities, particularly onshore, are working in partnership with the local communities that will be affected. The guidance that we will put in place is directed at doing exactly that.

I would like to go further and be able to mandate that developers are required to do that, but I am unable to do so because it is a reserved area. I hope that, at some point, the UK Government will see the wisdom of mandating the need to work with communities and for community benefit to be part of any community programme in the energy sector.

Liam McArthur (Orkney Islands) (LD)

I thank the cabinet secretary for early sight of the statement. I welcome the strategy and, in particular, the acknowledgement of the contribution that tidal and marine energy can make to meeting the ambitions.

The Climate Change Committee highlighted last month that

“Few enabling factors are likely to have a bigger impact on delivering Net Zero ... than the ability to shape”


”workforce in time to meet the demands of the transition.”

To be fair, the plan acknowledges that, but there is a mountain to climb to prepare Scotland’s workforce. Given the problems that have arisen in meeting earlier commitments to job creation, can the cabinet secretary confirm that the “Climate Emergency Skills Action Plan 2020-2025”, which is due to be updated later this year, will include a detailed and quantifiable route map to developing the skilled workforce that will be needed to fill the 77,000 green jobs that are expected by 2050?

Michael Matheson

I particularly welcome Liam McArthur’s comments on tidal and marine energy, which he will obviously have a keen interest in, through his being the local member for the area in which the European Marine Energy Centre is, which is a world-recognised centre for developing that technology.

I agree with Liam McArthur’s point that there should be a very clear pathway for delivering the skills, employment opportunities and jobs that will go alongside the transition. We have embedded the just transition plan within the energy strategy so that we can clearly see how they are interlinked. The green energy strategy and the climate skills strategy that we will bring forward this year will reinforce that and provide much greater detail. I hope that they will give the level of detail that the member is looking for, and that we can demonstrate the clear pathway that we are determined to take in order to maximise the jobs and economic opportunities that come from transitioning our energy system.

Jenni Minto (Argyll and Bute) (SNP)

As the cabinet secretary will know, Argyll and Bute is a significant contributor to Scotland’s energy strategy through onshore wind, offshore wind, wave power and pumped storage, and through Islay being one of the carbon neutral islands. Can the cabinet secretary advise how the Scottish Government will ensure that rural and island communities across Argyll and Bute will see the benefits of the strategy?

Michael Matheson

It is important that Argyll and Bute benefits. One of the ways in which we can achieve that is through the carbon neutral islands strategy that has been introduced, which includes Islay in the member’s constituency.

Another piece of work that will complement our strategy is the islands energy strategy, which will be published in the coming year and will set out more detail on how we will ensure that the energy and just transition strategy has the right impact on our island communities, including those within Jenny Minto’s constituency.

Maurice Golden (North East Scotland) (Con)

A just transition to clean energy requires materials to build the wind turbines, heat pumps, electric cars and other infrastructure that we need. However, we cannot assume that those materials will be readily available. Global demand for resources is rising and we have all seen the shocks to international supply chains. Therefore, can the cabinet secretary confirm what proportion of materials can be sourced through domestic reuse, remanufacturing or recycling and, if not, when an assessment of that will be carried out?

Michael Matheson

I cannot give Maurice Golden the specific details, but he has raised a really important point. During the past nine or 10 months, because energy security has become such a central focus for European countries, the scale of the ambition to transition away from fossil fuel energy systems has grown significantly, so there will inevitably be constraints on availability of materials within the sector. It is impossible for the sector to scale up at the rate at which countries are now looking to transition away from oil and gas and to deliver renewable energy projects. There is no doubt in my mind that there will be material constraints that will have an impact on roll-out of some technology, so the member’s point is an important one.

Among the key things that will be central to addressing that are our looking at what we can produce locally in our domestic market including from recycling, repowering of some older onshore wind farms and moving early to secure access to materials.

This is an area in which Scotland has an advantage. We can move earlier than other countries that are now turning their minds to onshore and offshore wind. We are already in that space and are taking forward those technologies. We can help to secure greater access to markets and materials by moving early, which is why the strategy sets out a ramping up of our ambition and of the timeframe in which we want to deliver it. That should help to address the type of issue that Maurice Golden has highlighted.

Mark Ruskell (Mid Scotland and Fife) (Green)

The science of climate change demands that North Sea oil and gas be phased out. That is the right thing to do for people and planet. Today, Scotland’s energy strategy abandons the dogma of maximum economic recovery of oil and gas and sets a path to a renewables future that will leave no workers behind. The UK Government must follow Scotland’s lead. What plans does the cabinet secretary have to engage UK ministers on the strategy? Does he share my concern that, unless they change direction on oil and gas, they will undermine not just our ambitions but the whole Paris agreement?

Michael Matheson

There is a section in the strategy that sets out the clear areas of action that the UK Government needs to take forward, and I have provided a copy of the strategy to the UK Government secretary of state who has policy responsibility for the area. We are setting up a task force with the specific role of helping to implement the strategy, and I have invited the UK Government to have a minister join us on the task force in order to address the issues that the UK Government needs to address to drive forward the strategy and deliver on the just transition plan. I hope that the UK Government will work in partnership with us to deliver. We have offered the place on the task force in the spirit of co-operation. It is important that the UK Government is practical and open in recognising its role. I hope that it will take up the offer to join us on the task force in order to drive forward delivery of the strategy and the just transition plan.

Jackie Dunbar (Aberdeen Donside) (SNP)

Will the cabinet secretary provide more detail on how the £75 million energy transition fund will support our energy sector and the north-east to make progress on the energy transition as we move towards net zero?

Michael Matheson

Four projects have already received funding through the energy transition fund, through which we are investing £75 million in the north-east. Those projects are the Global Underwater Hub, the net zero technology transition zone, the Energy Transition Zone and the Aberdeen hydrogen pub—sorry, the Aberdeen hydrogen hub. The Aberdeen hydrogen pub is an idea, but I cannot see the Scottish Government investing in alcohol sales. [Laughter.] Those projects are all about protecting existing jobs and promoting creation of new jobs in the north-east. We will look to build on that as we go forward with funds, in the years ahead.

Brian Whittle (South Scotland) (Con)

I agree with the cabinet secretary that Scotland has the potential to be a world leader in production and exporting of green hydrogen, which is a market that is growing fast. However, to gain first-mover advantage, Scotland needs to invest now at a level that allows fast development of hydrogen production. Many other countries are ahead of us, including countries in the middle east. It is a fast-expanding market. Will the Scottish Government ensure that public investment in and support for green hydrogen match the opportunity and the Government’s ambition? This cannot be another Scottish Government promise that is not met with action.

Michael Matheson

I welcome Brian Whittle’s support for green hydrogen. I completely agree that there is huge potential. I think that our green hydrogen market will be driven not by domestic demand but by export opportunities. Scotland is in a unique position in Europe to capitalise on that, which is exactly what we are determined to do. The hydrogen action plan that I published last month sets out the export plan for how we intend to go about that.

In October or November last year, we set out our hydrogen proposition to help to support the manufacturing industry in Scotland, and to attract manufacturing in the hydrogen sector into Scotland. We are already engaging with a range of stakeholders in the industry that have an interest in coming to Scotland. They are particularly interested in Scotland because the gateway to delivery of green hydrogen is renewable energy—offshore and onshore wind—and we are already able to set out not just our plans but our targets. Our leasing rounds have already happened, so those companies can see that it will become a reality and that other countries are behind us in achieving that.

I recognise that some countries in the middle east are more advanced than we in the UK and other parts of the world are because of the level of investment that they are making, but members can be assured of our focus on ensuring that we maximise on the opportunity that is provided by green hydrogen. It could be a major economic boost for Scotland for many decades to come.

One of the other reasons why we are in a strong position in taking forward green hydrogen is our oil and gas sector. The skill sets within that sector can transition very well into the hydrogen sector. Few countries in the world that have set ambitious targets for green hydrogen have the skills base that we have, which can drive the whole sector.

That combination of skills in the oil and gas sector and the build-out of our onshore and offshore renewables gives us a real opportunity to be one of the major players, particularly in Europe, in the delivery of green hydrogen for export purposes. We are determined to capitalise on that and to build a hydrogen economy for future generations, because that could become a major part of our economy in the years ahead.

Stephanie Callaghan (Uddingston and Bellshill) (SNP)

I warmly welcome today’s commitment to significantly increasing gigawatt outputs for onshore and offshore wind. Can the cabinet secretary confirm his continued commitment to maximising the potential of solar energy, and can he perhaps touch on some of the reasons why Scotland’s solar ambitions require further consultation at this time?

Michael Matheson

The strategy sets out our proposition to extend and develop our solar capacity. We have about 411MW of solar power capacity; we want to look at increasing that. However, before we set a target, we want to consult the sector and the industry in order to understand what the most appropriate target would be for the future. I assure the member that the purpose of the strategy is to look at how we can build and expand our solar sector in Scotland. I hope that, after the consultation period, we will be able to set a clear target for how we do that.

Pam Duncan-Glancy (Glasgow) (Lab)

I welcome the ambition in the just transition plans to maximise economic benefit and to ensure fair distribution of opportunity in an inclusive way. However, I fear that that is not what is happening in our communities. Taxi operators in Glasgow are fearing for their jobs and livelihoods if plans to introduce the low emission zones go ahead in June. They are facing significant challenges in ensuring that their vehicles are compliant, including in actually finding compliant vehicles, and drivers have said that they might have to give up their jobs.

The impact of not getting this right is significant. Fewer taxis mean that women have fewer safe options for travelling home late at night—

I am sorry to interrupt, Ms Duncan-Glancy, but I need a question because we are running out of time.

—and disabled people could be stuck in their homes. Taxi drivers are really struggling.

The council has written to the Government to ask for additional funding and—

Ask a question, Ms Duncan-Glancy. We are running out of time.

Pam Duncan-Glancy

I am moving to my question now, Presiding Officer.

Can the minister update us on whether the Government has received the request for additional funding, and whether it will provide that funding? Will it ask the council to delay the zone until the funding is in place so that Glasgow can keep its cabs on the road and people can continue to rely on them?

Michael Matheson

I understand the point that the member has raised. That issue is not covered by the energy strategy and the just transition plan but by transport policy. I am more than happy to ask the Minister for Transport to write to the member to say whether we have received that letter and what action we are taking on the basis of the information that is provided within it.

I can squeeze John Mason in, if I get a brief question and a brief answer.

The cabinet secretary mentioned carbon capture, utilisation and storage in his statement. How are the negotiations with the UK Government going, and is it being any more constructive than its predecessors?

Michael Matheson

I am sure that all members recognise the critical importance of carbon capture, utilisation and storage, especially the Acorn project, not just to the Scottish energy transition in terms of delivering on our climate change targets, but because of the significant economic benefits that go alongside it.

We remain deeply concerned by the UK Government’s lack of progress on that matter. We have not had any confirmation of the timeline for the track 2 process. At one point, there was an indication that the track 2 process would start before the end of last year, but that has been delayed. We now have no certainty or clarity about the timeframe.

It is absolutely essential that the UK Government does not lose the major economic opportunity that the Acorn project would bring to Scotland. If that is lost, communities from the north-east to Grangemouth will rightly feel bitterly betrayed by the UK Government. We will continue to press the UK Government to ensure that it takes urgent action to address that issue, because it is mission critical for delivery on climate change here in Scotland and across the whole UK. Any further delay will waste money on a project that could be delivered now and could create jobs now. We will continue to press the UK Government to set out a clear timeframe for track 2, so that there is certainty that the Acorn project will be delivered, and swiftly.

That concludes the statement on Scotland’s energy strategy and just transition plan. I will allow a very short pause to enable front-bench teams to change position before the next item of business.